As a single wage earner living in the San Francisco Bay Area there is no way I'm going to be able to afford to retire early on my mere pittance of a salary. I'm turning 56 this month; my goal is to retire from my full-time job when I'm 66 and four months (because of when Soc. Sec. kicks in for people my age). I don't want to have to work a part-time job after retirement in order to pay for my medical expenses -- I live with chronic diseases and conditions - but time will tell.

I spent most of my adult life living with credit card debt. I've been debt free since October 2007, but have only now realized that I need to work on building my retirement nest egg if I am to be able to retire one year. My parents were both able to quit their full-time jobs when they were 55, but that was because they made wise financial choices throughout their lives (my dad - a retired banker - is still living and he still does to this day).

I have a 401(k) in which my employer does not match employee contributions, but does offer profit sharing (if the company has determined that it had a profitable year). On the advice of some of the members from the CCCD board I stopped contributing to the account (it is still active though) and opened up a ROTH IRA through my credit union. I was just informed by my credit union that they are going to start charging a $12.00 annual fee (because the ROTH IRAs are through an outside company) at the end of this month. I'm glad the fee isn't higher.

I am hoping to find sound advice and good tips from this board. And maybe some tough love when needed.

Many custodians do change an annual maintenance fee for your IRA or Roth IRA accounts. $12 is not bad. Many charge $30 to $45.

But your main concern should be what kind of return are you getting on your investments. Equities is usually the best way. Too often financial institutions offer only CD-like investments or even annuities. Mutual fund companies like Vanguard, Fidelity, or T Rowe Price offer many more choices. And discount brokers allow you to pick individual stocks, mutual funds, etfs or an array of other investments.

Since you paid back debt under the advice of the CC board (and big kudos for that!), you must be familiar with budgeting and tracking expenses. So I assume you have a good idea of what you need to live on over the course of a year. Do you have a recent version of your Social Security statement? How close does your benefit at 62, full retirement age, and 70 come to meeting those needs? Note that while some important expenses go down when you retire--no more contributions to retirement accounts, no FICA taxes or commuting expenses/work clothes, and for most of us, lower income taxes. But these expenses might be replaced by others such as bigger health bills and hobby expenses.

Let's say you'll get $1500/month ($18,000/year) from SS and need $30,000 year to live on. How can you make up the difference? The ol' rule of thumb for 60+ year old retirees says 4% per year is the maximum safe withdrawal rate from invested assets in something similar to a traditional 60% equities/40% fixed income portfolio. Without a pension, royalties, rental income, a job, or a sugar daddy, you'll need to come up with the other $1,000/month ($12,000/year) from the income generated by assets. At 4%, you want $300,000 invested. Plus an emergency fund. This is way more than most people save--I hope you make it if that's what you need.

My advice is simple--keep saving. The Roth IRA is a great idea, but you might look into other places to keep the account such as Vanguard or Fidelity. And it would be best if you could contribute the max per year. If your father wants to give you a nice gift every year, perhaps helping you to max out your Roth would be a good present.

I hope you can afford to stay in the Bay Area after retirement, if that is your wish, but there are many fine places that are more affordable.

Just like to add that my mother (almost 87) lives very well on about the scenario I used as an example in this post (she does have a non-mortaged house and no car or other debt).

My plan is to continue saving for retirement, with the goal of retiring at age 66 and 4 months. I don't want to work until I'm 70. My mom died at that age. An illogical thought that refuses to go away is what if I die at age 70 and never get to enjoy retirement? I said it was illogical! None of us know when we are going to die (I had one roommate who died in her late 20s in a plane crash and another who died in her early 30s of cancer).

I am figuring out now what I would need to live on.

I just went to the social security website to see what my monthly benefit amount would be at different ages but that part of the website is currently down. Murphy's Law! I'll try again during the week.

Currently rent is my biggest expense as I don't own a car. Second is my bus commute to another county. It is good that I'll be able to get rid of the latter once I retire.

The big question( which I won't be able to answer until I retire) is what will Medicare cover and what will my copays be?

If I stay in my apartment that would be a sound financial decision because my rent is one of the cheapest in the county. BUT, I would like to get a dog when I retire which means I would have to move to a place that allows pets (which means I'll mostly likely be paying more for rent, unless I go back to getting a roommate). And there would be the added expense of taking care of a pet. Something to thing about.

>> you want $300,000 invested.

I only have a tiny portion of that amount invested, which is why I'm here. What do you board members consider a fully funded emergency fund? How many months salary?

>> I hope you can afford to stay in the Bay Area after retirement, if that is your wish, but there are many fine places that are more affordable.

I was born and raised in the SF Bay Area and I love it here. And my family is here. If I were to move out of the area I really like Seattle (but that isn't a cheaper area either). I wilt in humidity and my body doesn't do well in extreme heat so I'm staying on the West Coast.

>> Just like to add that my mother (almost 87) lives very well on about the scenario I used as an example in this post (she does have a non-mortaged house and no car or other debt).

Secondly, when I was your age, I started seriously planning for retirement. I did not even start planning until joining a international company in 1992 at the age of 47, almost 48. I immediately signed up for the 401(k), although I could not start contributing until 3 months had elapsed. I contributed 3% and my company matched 3%. Everytime I received a raise, I figured the percentage of the raise and added that to my contributions.

When I left the company (due to downsizing) at the age of 54, I had accumulated a nice little nest egg. However, I was not too happy with the way the Plan Administrator was handling my money, overall. Since I started my own company, I rolled over the 401(k) to the SEP-IRA of my company (SubChapter S Corp.)established through Fidelity, and began placing 15% of my salary into the SEP-IRA every year. (Now, I can increase that to 25%, and have started doing so for 2012.) Although I collected SS, I continue to work about 10 hours per week. Due to the fact that my hourly rate is comfortably high, I can get away with it. I live on my SS, and save about 1/2 of my monthly pay (in my Credit Union in a liquid savings account as a E-fund), and play with the rest (travel, nice lunches or dinners with friends, etc.)

The most important thing I did, as stated in my post on the other board, was learn to live comfortably on $1500 per month, net, which is what I guestimated my SS income would be (after all deductions from my SS funds), and I accomplished that handsomely. I pay my CC bills in full each month, along with the HELOC on my condo, utilities, auto upkeep, food (and I eat well), Long Term Care Insurance, all other insurance, etc. In SC, once one reaches 65, our property taxes go down a bit, so that saves me money. I have a 1994 Volvo 940 which is in great running condition, and I have no intentions of trading it until it dies a natural death (hopefully, not for another 7 or 8 years.)

This is a great time for you to learn to live on what your income will be when you retire. Don't forget to deduct what your Medicare and PartD Prescription coverage will be (guessing) as they are deducted from your gross SS check.) Once you learn to do that, you can save the excess and you will certainly feel far more financially secure. Retirement is WONDERFUL!!! You can spend time with dear friends or just be a hermit at home when you feel like it. Me? I sleep until 10:30 AM, although I am a nightowl (always have been), and don't usually go to sleep until 2:00 AM.

Who knows, you might want to go into another field when you start collecting SS, as you will have that money each month, and can think of what you really would like to do. 66 years of age is young. My father did. He worked until he was 88 years of age, and I will probably do the same, good Lord willing. I love to feel constructive, and also like making the extra money, as well as using my brain. I find my friends who completely quit working are having problems with their memory, they are not socializing as much, and their health is not as good.

An illogical thought that refuses to go away is what if I die at age 70 and never get to enjoy retirement?

It may not be illogical, depending on your health conditions--are they mainly annoying and well controlled or serious and apt to shorten your life? (you don't need to post an answer to that-) If I had a life-threatening condition, I'd retire sooner rather than later unless my job was my raison d'être.

Social Security benefits are designed to be actuarially equal no matter what age you start collecting. In other words, you end up with the same total amount of $$$ over the years whenever you retire between age 62 and full retirement age, IF you live an average lifespan. If you live longer, delaying the start of SS works out better financially--much better if you start collecting at 70 and live to 100. But not necessarily emotionally or physically better if you miss years of happy retirement. So whether you retire at 62 or 66 and 4 months or some time in between, you will have collected the same amount of money by age 77-80 (the calculation varies slightly at different amounts). If you live longer, you'll of course do better financially by having retired later, but not necessarily be better off overall.

NOTE60% of women and 50% of men start collecting SS at age 62, 75% by their full retirement age, and fewer than 10% wait till age 70 to collect the maximum monthly benefit.

The biggest emergency before retirement is usually losing your job, one worry you won't have in retirement ;-) The biggest emergencies in retirement tend to be health-related: needing a nursing home/assisted living/home care aide/cleaning & cooking help when you're unable to care for yourself either temporarily or permanently, uncovered expenses like hearing aids and major dental work, covering insurance deductibles (probably doesn't apply to someone who is house-free and car-free...one of the reasons a lot of seniors prefer to rent!), legal and other professional help. With family in the area, hopefully some of them are younger and in a position to pitch in from time to time. And neighbors are often kind to oldsters. My 30something son lives in a condo complex that is mostly a mix of older women and younger men. The women provide security in being home most of the time and accept packages while the men are at work. The men do handyman things, heavy lifting, and run occasional errands for the ladies.

The big question( which I won't be able to answer until I retire) is what will Medicare cover and what will my copays be?

I hope some of those already on Medicare can chime in here. My mother has a Medicare supplemental policy (through AARP) that seems to pay for most of what Medicare doesn't cover, but her medical needs are fewer than average. Note that things like health insurance (even supplemental) typicality cost more in the Bay Area than South Carolina--having moved from one to the other 10 years ago, I know a little about it.

If I stay in my apartment that would be a sound financial decision because my rent is one of the cheapest in the county. BUT, I would like to get a dog when I retire which means I would have to move to a place that allows pets (which means I'll mostly likely be paying more for rent, unless I go back to getting a roommate). And there would be the added expense of taking care of a pet. Something to thing about.

Is it possible that a long-term reliable renter like yourself could get special dispensation from the landlord if you acquire a small, quiet dog and are home all day to take care of it? Try offering additional security deposit and proof of umbrella/liability insurance to cover possible damage to people and property. I'd be reluctant to give up inexpensive digs where I was happy. Of course, 10 years from now your situation could be quite different. BTW, don't underestimate the expense. I've heard a good rule of thumb over time is $100/month per dog and $50/month per cat, which takes into account occasional expensive vet care and professional grooming (if you do all your own grooming and will treat expensive conditions with charity help or euthanasia, the cost would be lower). On the other hand, pets usually make their owners very happy--as long as they can afford it.

I was born and raised in the SF Bay Area and I love it here. And my family is here. If I were to move out of the area I really like Seattle (but that isn't a cheaper area either). I wilt in humidity and my body doesn't do well in extreme heat so I'm staying on the West Coast.

I lived in the Bay Are for 8 years and understand your feelings. Worst case, you could move to a smaller, somewhat less expensive city with a transit connection. For example, I think there are buses from Santa Cruz or there used to be. Portland has good public transit. Not to mention the fine hippie town of Eugene OR (can't wait to visit the Northwest myself--never been there). I'm not up on Amtrak and bus connections on the West Coast.

"As a single wage earner living in the San Francisco Bay Area there is no way I'm going to be able to afford to retire early on my mere pittance of a salary." shire

You're going to have to move to a lower cost of living area. Someplace cheaper. Way cheaper. I live in Tennessee and it is about like living in in a third world country cost wise.

I recommend you get away from the city number #1. Cities are expensive. Live in a small town or even village. There are plenty of small towns that are close enough to a big city where you can visit when you want to.

"You're going to have to move to a lower cost of living area. Someplace cheaper. Way cheaper. I live in Tennessee and it is about like living in in a third world country cost wise.

I recommend you get away from the city number #1. Cities are expensive. Live in a small town or even village. There are plenty of small towns that are close enough to a big city where you can visit when you want to.

Art "

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The original post goes back to 2012 - so I doubt the issue keeping the posterup at night. But your comment about city versus smaller town or rural life istrue except tha there are people who like the benefits of a major city.You generally don't have to go out of town for specialists. You likely have a greater variety of entertainment options. You can find more book stores.

The medium to small towns have retrictions sometimes - not a major problem mosttimes. But I find there is a significant decline in areas where there is no ornegative growth. Jobs and real estate and economic life needs to be growing - orso I feel based on the towns I have lived in and visited.

"But your comment about city versus smaller town or rural life istrue except that there are people who like the benefits of a major city." - Howie

Yeah, and I'd like to live in Vero Beach, Florida and eat lobster every day excepting I ain't that rich. Unfortunately reality slaps me in the face and says "Art you're a poor Tennessee boy and you got to live within your means".

I'd like to travel to Vancouver, British Columbia and eat my way across the city and snarf down huge quantities of seafood like I saw Andrew Zimmern and Anthony Bourdain do on TV but unfortunately my pay grade isn't anywhere near what those two lucky guys is so I'll have to stay here in Middle Tennessee and eat Chicken legs and vegetables that I buy from Kroger's mark down section.

What I like and what I can afford aren't exactly the same thing. I'm smart enough to know I got to be realistic and live within my means.

"What I like and what I can afford aren't exactly the same thing. I'm smart enough to know I got to be realistic and live within my means.

Art"

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you say that as if you didn't enjoy Tennessee - and the area is quite thecharmer. I first had lobster with my wife on our honeymoon in Florida back in 1977.Since then I may have had it 3 or 4 times. Can be tasty - and can be terrible.I was raised in Maryland and have a preference for blue crab - which ispricey anymore. When I visit Maryland I try to have crab cakes or steamed crabsif they are in season.I think people going into retirement need to know their "means" and live within them.But that does not generally mean they can't enjoy themselves - and that would includeliving in a city if they so chose. Priorities need to be selected - and the cost of living in a city of the size of Knoxville say is much more affordable than others.

Howie52DW and I have talked about moving - but increasingly I am considering what needs tobe done to our house to allow an easier living as we age. We have budgeted enough towiden many doors and put a ramp in place should we need to do so.

<<DW and I have talked about moving - but increasingly I am considering what needs tobe done to our house to allow an easier living as we age. We have budgeted enough towiden many doors and put a ramp in place should we need to do so. >>

Personally, I consider the emphasis many people place on experiencing various kinds of sensation to be a waste of time and money.

Many people start out retirement with the idea that it should be a cornucopia on sensations --- going so far as to draw up a "bucket list" of sensations they want to have.

In the end, I think simplicity in life is what people usually decide is worthwhile. Less emphasis on sensation and more on the quiet enjoyment of life.

"you say that as if you didn't enjoy Tennessee - and the area is quite thecharmer." Howie-------------------------

The best thing about Tennessee is it is cheap to live here. Probably one of the cheapest places in the country to live. I only live in Tennessee because my wife is a Tennessean and this is what makes her happy. I am here for her. Her family is here and her best friend from college lives in the next town over. If you marry a girl from Tennessee and once they get you to move to Tennessee, you ain't leaving. People from Tennessee LOVE Tennessee. Sort of like the way people from Texas, native Texans, love Texas.

Spring and Fall are beautiful. Seriously mild and pleasant with lots of flowers blooming and all the leaves young and green. Tennessee winters are ugly, cold, dreary, grey, humid, and the summers are hot and humid with tons of mosquitoes. A lot of our weather comes from the midwest and our winter looks a lot like winter in the middle of the country, cold, grey, and dreary. Also in the summer the middle of the country heats up once it gets hot it stays hot till at least the middle to end of September.

If something happened and I was on my own again I'd either back to Athens, Georgia and live near my sisters or move to Vero Beach, Florida and live in a 55+ Senior community. I would not stay in Tennessee.

Tennessee winters are humid? Is this true? If so, that would be the dreariest of all. I expect winter to be cold and long (slightly upstate NY) but never humid. Most years we luck out and the humidity doesn't kick in until June, sometimes late June. Humidity alone has made me reconsider my love for summer as a kid.

"Tennessee winters are humid? Is this true? If so, that would be the dreariest of all. I expect winter to be cold and long (slightly upstate NY) but never humid. Most years we luck out and the humidity doesn't kick in until June, sometimes late June. Humidity alone has made me reconsider my love for summer as a kid." - smurfdogg

It rains a lot in the winter in Tennessee. The sky is grey and it is usually between 37 - 43 degrees. It will drop below freezing at night. When we get clear and blue skies in the winter that is when the temperature drops way below freezing. When it is real cold is when it is clear with blue skies, otherwise the sky is grey. All the trees look dead, lichen and moss grow on them and also dead branches on oak trees get what are called "cloud ear mushrooms" growing on them - which Asian people turn into soup.

This is what a good friend back in Knoxville said about Tennessee "I like Tennessee because we got good cold winters and good hot summers." He said it like it was a good thing. Spring and fall are pretty in Tennessee but summers are hot and humid and the winters are cold, grey, and dreary. It can get up over a hundred degrees in July and August.

"Cloud ear fungus (Auricularia polytricha, syn. Hirneola polytricha) is an edible jelly fungus. It grows on trees in mountainous regions, is gray-brown in color, and is often used in Asian cooking, especially Chinese cuisine.[1]"

Thanks for the explanation. I always thought it was the northeast that had a grip on two terrible weather seasons -- summer and winter.

How would you compare the weather in Athens, GA? I've known people from there who loved their little college town and others who couldn't wait to leave. Personally, it sounds damn nice to me. But I guess the summers could get rough...and now you've alerted me to potential lousy winters...do they reach Athens?

"How would you compare the weather in Athens, GA? I've known people from there who loved their little college town and others who couldn't wait to leave. Personally, it sounds damn nice to me. But I guess the summers could get rough...and now you've alerted me to potential lousy winters...do they reach Athens?" - Smurfdog

Personally I think Athens, Georgia weather is more moderate than our weather. We have colder winters and hotter summers. The reason why is we are the "mid south", closer to the interior of the country and the interior of the country heats up in the summer. We have more days over 100 degrees. Athens, Georgia also has less snow and milder winters. Athens weather comes up more from the Gulf of Mexico and our weather tends to come more from the west. It's a little different. For instance for the next ten day forecast our weather is supposed to be in the low 50s and Athens, GA's weather is supposed to be in the 60s with a few days in the low 70s. I lived in Athens, GA for about 10 years and really liked it. I met my wife there in 1974. She was a Journalism major and I was an Animal Science major. We left Athens, GA in 1982 and moved to Knoxville, TN.

I was working as the manager of the University of Georgia School of Pharmacy Animal Facilities from 1980-1982 when my wife asked me if I wanted to move to Tennessee. She had an offer of a faculty position at the Uni. of TN and I was picturing me fishing in all those TVA lakes around Knoxville. When we moved here though I wasn't realizing it was going to be for the rest of my life. After living in Knoxville for a year and a half (I worked as a meat cutter at an IGA not too far from our house during that time) I finally got a job as the "Animal Facilities Coordinator" for the Uni. of TN Vet School. Anyway we've been living in Tennessee now for ~ 36 years. I was 29 when we moved here and I'll be 65 in about a month.

Athens, GA is a great place to live. Lindytoes knows people who moved to Athens, GA just because they read about in some magazine as a good place to retire.

Thanks, Art. I appreciate your taking the time to explain this all to me. I've always loved college towns, as long as I don't live within puking distance of the local revelers. The constant visitors in the arts keeps the mind alive. I enjoy my culture where I can get it!

"Thanks, Art. I appreciate your taking the time to explain this all to me. I've always loved college towns, as long as I don't live within puking distance of the local revelers. The constant visitors in the arts keeps the mind alive. I enjoy my culture where I can get it!" - smurfdogg

My sister Lindytoes lives about 9 miles from Athens, Georgia. She participates on the Motely Fool boards also. Anything you want to know about living in Athens, Georgia and the surrounding towns she can tell you. I visit pretty often but Lindytoes lives there. I also have another younger sister that lives in Athens, GA too, plus a couple of nephews and a niece. They are all grown up now.

A friend of mine, John, from Upstate New York called the University of Georgia "The Harvard of the South." It's a beautiful campus. John went to Uni. of GA with me and we both majored in Animal Science there.

"Tennessee winters are humid? Is this true? If so, that would be the dreariest of all. I expect winter to be cold and long (slightly upstate NY) but never humid. Most years we luck out and the humidity doesn't kick in until June, sometimes late June. Humidity alone has made me reconsider my love for summer as a kid"

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Generally, the whole east coast suffers from high humidity - pretty muchall year. The colder climates see the humidity as snow in winter - wet snow. Thesouthern climates see the humidity as cold rain in winter. And in between there are ice storms in the winter.

Go west if you want to avoid humidity.

Howie52

I recall Buffalo over to Watertown, NY as heavy snow areas - wet snow in theearly season and dry only after the lakes froze over.

Howie says "I recall Buffalo over to Watertown, NY as heavy snow areas - wet snow in theearly season and dry only after the lakes froze over."

We get a couple of little snows each winter but it usually isn't much, or at least lately it hasn't been. We've lived here in Middle Tennessee for 12 years now and we haven't had more than a few inches each winter. Middle Tennessee is a little different than East Tennessee. It is a few degrees colder in East Tennessee than it is here in Middle Tennessee. Higher elevation I guess?

Back in East Tennessee we had some snows of a foot and up to 18". We lost power for 4 days once and were snowed in for a week. Our road was a mess.

You just gotta deal with it. Or like my mom used to say "you just gotta live in this world kiddo."